FOOL'S EYE VIEW
How much?!

By Jane Mack (TMFJane)
May 10, 2002

If you've got a child who complains that they don't have as much money as their friends, then you'd better cross your fingers and hope they don't catch sight of the latest survey on children's income. According to a new report by the Abbey National, a fifth of parents who pay their children for chores are handing over an astonishing £1,200 a year.

Now surveys often make interesting reading whenever they're published but these new numbers don't really tally with the more realistic sounding figures published elsewhere. For example, the Wall's 27th Pocket Money Monitor, conducted by Unilever last November, revealed that children between the ages of five and sixteen get an average of £3.19 a week in pocket money and earn an average of £1.52 from doing the odd job around the house. By my reckoning that works out at £244.92 a year, which sounds a little less startling.

The Abbey National's survey does assume a household where parents regularly pay their children for doing chores – many parents don't - but they did interview a cross-section of 702 parents and £1,238 a year per child was the figure 21% of them came up with. It would be interesting to know if they themselves were taken aback by how much they paid their children.

The figure assumes (in a typical two-child family where the parents pay for the chores listed below):

• Making the bed seven days a week @ £0.76 = £23.56 per month
• Setting and clearing the table five times a week @ £0.53 =  £10.60 per month (assuming four-week months)
• Loading/ unloading the dishwasher five times a week @ £2.52 = £50.40 per month
• Washing the car once a month @ £2.30 = £2.30 per month
• Completing homework four nights a week @ £1.02 = £16.32 per month

• TOTAL: £1,238.16 X 2 = £2,476.32

As the survey points out, it would be cheaper for parents to hire a cleaner for a couple of hours a week!

Paying your children for doing the odd chore around the house is certainly a good method of teaching them about the value of earning money from hard work. And if you follow it up by showing them how to budget and to save for the long term as well as for the things they want to buy immediately, they might have a chance of learning how to plan their finances properly in adulthood. There's really no other way of teaching children how to manage money unless they have a regular income out of which they can save as well as buy.

However, by paying them to do household chores, you are really linking two separate issues. On the one hand by giving them chores, they learn to be a responsible and participating member of the household. On the other, giving them regular pocket money or an allowance enables them to learn how to manage their money. But do you really want to hand out 50 pence every time your 10 year old empties the rubbish or unloads the dishwasher? And isn't doing their homework part and parcel of day-to-day school life?

As Janet Connor, Abbey National's Retail Marketing Director, says: "So much for the days of mummy's little helper lending a hand around the house – today's kids well and truly know what side their bread is buttered on! 

Perhaps the method would be better used when your child needs to earn some extra money for a special item and is willing to do over and above the usual around the house in order to achieve their aim.

If the Abbey National's survey sounds a little surprising, the study revealed one little fact that seems par for the course. Boys are paid more than girls for almost all of the household chores they are usually asked to carry out. Plus ça change... as they say.

More: Fool's Guide To Investing For Children